COVID-19 pandemic
On March 14, 2020, the U.S. Centers for Disease Control and Prevention issued a No Sail Order for cruise ships. Concurrently Norwegian Cruise Line Holdings implemented a suspension of all cruise voyages across its three brands, with all 28 ships in port or at anchor and all passengers disembarked by March 28, 2020. This suspension had subsequently been extended through June 30, 2020.
On May 5, 2020, in a filing with the U.S. Securities and Exchange Commission, Norwegian Cruise Line Holdings said there is “substantial doubt” about its ability to continue as a “going concern” as it faces a liquidity crunch over the next twelve months.[24]
Remarkably, by the next day, NCLH was able to secure over $2.2 billion of additional liquidity in oversubscribed capital markets transactions, but at a price: (1) $400 million in common stock at $11 per share; (2) $675 million in senior secured notes due 2024 at a 12.25% interest rate; (3) $750 million in exchangeable notes due 2024 at 6% interest rate, and exchangeable at any time into common shares at $13.75; and (4) $400 million private investment from a global private equity firm.[25][26] On May 7, 2020, NCLH CEO declared that the company has secured enough liquidity to get through potentially 18 months of zero revenues and may resume cruising later in 2020.[27][28]
Although revenue plummeted 99% year to date, and with a net loss of $715 million in the second quarter,[29] not to mention cruises canceled until at least November,[30] CEO Frank Del Rio commented that he expects relaunch to take 6+ months once cruising fully begins again.[31]
The "no-sail" order from the CDC was extended through December 31, 2020.[32]
